Levar Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

question 247

Multiple Choice

Levar Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Order Fulfillment Department provides services to both divisions. The variable costs of the Order Fulfillment Department are budgeted at $73 per order. The Order Fulfillment Department's fixed costs are budgeted at $470,400 for the year. The fixed costs of the Order Fulfillment Department are determined based on the peak period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $621,600 and fixed costs totaled $473,970. The Consumer Division had a total of 1,840 orders and the Commercial Division had a total of 6,560 orders for the year. For purposes of evaluation performance, how much Order Fulfillment Department cost should be charged to the Commercial Division at the end of the year?

• A) $831,680
• B) $855,588
• C) $840,918
• D) $846,240

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Definitions:

Auditory Canal

A tubular structure of the outer ear that conducts sound waves from the external environment to the tympanic membrane (eardrum).

Olfaction

The sense of smell, a chemical sensing system that allows the detection of volatile substances in the environment.

Gustation

The sense of taste, which is one of the five sensory systems and is initiated by flavor compounds stimulating the taste buds on the tongue.

Chemical Senses

Sense modalities including taste and smell, which involve the detection of chemicals in the environment and play a critical role in the experiences of flavor and scent.